Internet service provider (ISP) and international calls carrier NetVision Ltd. (TASE: NTSN) opposes the Ministry of Communications' policy of opening the cellular market to competition through the introduction of mobile virtual network operators (MVNOs). Under the new policy, announced last week, NetVision may not become an MVNO because it is a sister company of mobile carrier Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL). Both companies are units of IDB Holding Corp. Ltd. (TASE:IDBH), controlled by chairman and CEO Nochi Dankner.
Originally, the Ministry of Communications wanted affiliates of mobile carriers, such as NetVision, to become MVNOs, but changed its policy last week, and set very tough entrance terms for them.
NetVision CEO Richard Hunter said that the Ministry of Communications' policy was illogical because it meant that there would be no MVNOs in Israel. "If neither we nor Shufersal Ltd. (TASE:SAE;Pink Sheets: SSLTF) can become an MVNO, nor any company with a connection to IDB, then there will be no competition in mobile telephony," he said.
NetVision wants to become an MVNO in part because Israel's mobile carriers are becoming ISPs, and because competitor 012 Smile.Communications Ltd. (Nasdaq:SMLC; TASE: SMLC) planned to become an MVNO. Meanwhile, Shaul Elovitch is selling Smile's businesses so it can acquire the controlling interest in Bezeq The Israeli Telecommunication Co. Ltd. (TASE: BEZQ), and it is not clear who the new owners of the business will be or if they will want to launch MVNO activity.
Under the Ministry of Communications' policy, an affiliate of a mobile carrier cannot become an MVNO unless not entering the mobile telephony business will cause it material damage.
Published by Globes [online], Israel business news - www.globes-online.com - on November 9, 2009
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